Berenberg lowers target price on Eurocell following H1 numbers
Analysts at Berenberg lowered their target price on building materials supplier Eurocell Plc from 300p to 270p on Thursday after the group's interim results revealed that subdued end-markets had continued.
The German bank noted that overall revenue showed some 10% growth year-on-year, primarily on the back of its Alunet acquisition, and adjusted underlying earnings had grown by 9% to £10.1m.
However, Berenberg noted that Eurocell management continues to highlight the subdued broader trading conditions in UK end-markets, as well as continuing macro uncertainty. As such, it indicated that it now views the FY25 outlook as being below its previous expectations.
"We update our numbers for these results, with our adjusted EBITDA numbers falling by 5-8% across the forecast period, although by more further down the income statement," said Berenberg, which kept its 'buy' rating on the stock.
"We would highlight that these subdued market conditions have been flagged by several peers in the space in recent weeks and that delivering on our updated numbers would still result in the business ultimately delivering flat organic revenues, gross margins and overheads in FY25 against a tough backdrop."
Berenberg added that Eurocell currently trades on a 9.4x FY25 price-to-earnings ratio, 4.4x EBITDA and 9.5x EBIT.
Reporting by Iain Gilbert at Sharecast.com
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